State turns profit on GE HQ sale
Company never tapped $25m in tax breaks
MAYBE LESS IS MORE in Fort Point.
Since announcing it would move to Boston in 2016, General Electric has scaled down the scope of its business, and on Thursday it sold off a 2.7-acre Boston property once slated to be part of the company’s headquarters.
The company will have a more modest presence than the 800-job headquarters complex outlined by the manufacturing and technology juggernaut three years ago, but the sale was profitable, the state recouped its investment, and GE is still establishing its headquarters in Boston.
The buyer is a team-up between National Development, a local outfit, and Alexandria Real Estate Equities, which has a track record of catering to life sciences businesses.
Jon Chesto, at the Boston Globe, spoke to Jay Ash, who helped broker the company’s move from Connecticut to Boston when he was Gov. Charlie Baker’s economic development chief, and Ash had a positive spin on the sale.
“In this case, the state is making money on its investment, and getting the GE headquarters at the same time,” said Ash, who now heads up the Massachusetts Competitive Partnership.
After the deal to bring GE to Boston was announced, there was criticism of the financial favors from the city and state as well an outcry over the promised support for a helipad that would enable GE executives to soar above the region’s transportation messes. The company has since tempered its enthusiasm for a helipad, and the deal that closed Thursday could quell Bostonians’ concerns about public dollars going to help a company that has gone years without owing federal income taxes. GE has a more sullied reputation in the Berkshires, where it polluted the Housatonic River near its old plant in Pittsfield.
MassDevelopment is making back the $87 million it spent on the property – which the Baker administration had said would be a value-add with or without GE – plus $11 million in profit. According to the Globe, GE had not tapped into the $25 million in tax breaks offered by the city of Boston and they don’t carry over to the next owner. The site that sold for $252 million is primed for development with 297,000 square feet of office space permitted.
Given all the congratulations bestowed on Baker and Boston Mayor Marty Walsh for wooing the company years ago, they might feel a little sheepish seeing their prize so diminished in stature.Walsh has already endured some public ridicule for his track record of backing big endeavors that subsequently slip out of his grasp.
GE investors, who met for an annual meeting the day before the real estate news broke, sounded pleased by the company’s new direction under CEO Larry Culp, according to Bloomberg columnist Brooke Sutherland. Sutherland credited Culp with filling the company’s coffers with money from the sale of pieces of the business, but the column reported that GE still expects negative cash flow this year.